Periodic onion supply crisis

The advent of winter in the North is normally greeted with an abundance of green vegetables in affordable price to the aam aadmi but what is now visible in the local vegetable market is the vertiginous rise in the prices of popular vegetables such as peas (matar) and the widely consumed common people protein, the onion.  The bulbous root which is a part and parcel of the indigent people’s wonted daily diet is now woefully absent as its cost at the retail level is swinging between fifty to sixty rupees per kilogram. In the past too, onion price spike had unseated governments in the State such as Delhi and this time around on the eve of the two keenly watched and contested Assembly Polls in Gujarat and Himachal Pradesh, the tear jerker hardly evoked any mention in the campaign! But this is in no way detracting the inordinate spurt in onion prices in the major wholesale markets like Lasalgaon in Maharashtra to the dismay of its regular users pan-India and particularly so in the North.
It was only in summer this year (May-June) when farmers had to do distress sales of onions at around two rupees per kg in several mandis in Madhya Pradesh, the second largest producing State after Maharashtra in the country. The situation was fraught and tense when farmers took their fight to the streets to highlight their plight and police fired at them, causing some unfortunate deaths. Realizing the rickety situation, the MP Chief Minister swiftly declared a decision to procure onions at Rs 800 per quintal, spurred by the sensitivity of the issue. The State lost little time in procuring 8.76 lakh tonnes. As the farm expert  Ashok Gulati and former Secretary, Ministry of Agriculture Siraj Hussain wrote in a monograph recently that in the absence of adequate storage capacity in the state, onions had to be quickly disposed off through the public distribution system and open market sales at well-nigh one-fifth of the cost. They said the whole operation entailed a loss of Rs 785 crore to the MP government. 
While there is nothing wrong in this type of intervention to use trade policy as a tool to tame the market,  wisdom lays in advance action plan so that in case of a bumper crop, export can be stepped up and in case of paucity, imports can be contracted by availing of advance crop estimates in a rational manner. Without such a forethought any reaction to emerging situation as it is being done in an ad hoc manner is bound to entail losses to the exchequer besides commercial calamity to the contracting entities. It is also time that the authorities learnt to ramp up sufficient investment in modern storage amenities and processing facilities so that the onion growers need not shed tears interminably over their incredibly fluctuating fortunes! (IPA)

Sunday, 26 November, 2017